Valdez v. Michpat & Fam, LLC

JESSICA VALDEZ, Plaintiff, v. MICHPAT & FAM, LLC, doing business as Dairy Queen Grill & Chill Restaurant, and PATRICIA NAPPO, also known as Patricia Demint, Defendants.

No. 20-CV-2570 (AMD) (SIL)

United States District Court, E.D. New York

March 30, 2022

MEMORANDUM DECISION AND ORDER

ANN M DONNELLY UNITED STATES DISTRICT JUDGE

The plaintiff brings a claim under the Fair Labor Standards Act (“FLSA”) for unpaid overtime on behalf of herself and others similarly situated (ECF No. 1 ¶¶ 48-54) as well as claims under the New York Labor Law (“NYLL”) and New York Compensation Codes Rules & Regulations (“NYCRR”) for unpaid overtime spread-of-hours violations, untimely payments, and inaccurate wage statements and notices on behalf of herself and others similarly situated.^[1]The plaintiff moved on March 26, 2021 for conditional certification of an FLSA collective action with respect to the FLSA claim, as well as certification of a Federal Rule of Civil Procedure 23(b)(3) class action with respect to the NYLL and NYCRR claims. In a comprehensive decision on January 6, 2022, Magistrate Judge Steven I. Locke recommended that the plaintiff's motion be granted in part and denied in part. The defendants filed their objections to Judge Locke's conclusions on January 20, 2022 under Federal Rule of Civil Procedure 72. For the reasons below, I reject the defendants' challenges.

BACKGROUND

I. Plaintiff's Case^[2]

The defendant MichPat & Fam, LLC (“MichPat”) operates the Dairy Queen franchise in Medford, New York. (ECF No. 1 ¶ 12.) The defendant Patricia Demint is MichPat's managing member and general manager, and oversees “the daily operation of this Dairy Queen franchise and . . . controls the terms and conditions of employment for all of Dairy Queen's employees, in that she had the power to hire and fire all employees, supervise and control employee work schedules, determine the rate and method of wages paid to all employees, and was and is responsible for maintaining employment records.” (ECF No. 1 ¶ 31.)

In December of 2017, Demint hired the plaintiff to work at MichPat's Dairy Queen. The plaintiff “performed manual work as a grill-line worker for hourly pay until approximately mid-May 2018, ” when she was promoted to manager. (Id. ¶ 34; ECF No. 33 ¶ 3.) Nevertheless, she “continued to perform her duties as a manual grill-line worker, and also ran the ice cream section, prepared the work schedules, ordered supplies, cleaned the restaurant and equipment, ensured the food was cooked at the right temperature and that the staff wore proper equipment, and hired and fired staff (id.); “virtually 100% of her work[ ] was spent completing manually laborious tasks, such as, e.g., cooking, cleaning, serving food, checking food temperatures, and handling store equipment orders as they arrived.” (ECF No. 1 ¶ 35; ECF No. 33 ¶ 5.) The plaintiff worked five to six days each week, between 32 and 45 hours per week, and was paid on a bi-weekly basis as if she were an hourly employee. (ECF No. 1 ¶¶ 32, 36, 37; ECF No. 33 ¶ 8.) On October 25, 2019, Demint fired the plaintiff. (ECF No. 33 ¶¶ 2, 4.)

The plaintiff alleges that MichPat and Demint avoided paying her for overtime by logging hours that she worked in one week as if they occurred in a different week, so that she never had more than 40 hours in any given week. (ECF No. 1 ¶ 39; ECF No. 33 ¶ 7.) Demint also instructed the plaintiff and other managers to delete and move their employees' hours, which she coordinated over a text messaging application; Demint kept her scheme secret by using her employees' punch-codes in the time logging system when she deleted or moved their hours. (ECF No. 33 ¶¶ 9-10, 12-13.) The scheme affected at least 20 other employees, whom the plaintiff lists by name. (ECF No. 33 ¶ 10.)

The defendants also asked the plaintiff to work off-the-clock (id. ¶ 7), and to work shifts of more than 10 hours, but did not provide spread-of-hours pay. (ECF No. 1 ¶ 42.) Nor did the defendants pay the plaintiff directly; they deposited her paychecks into an account held by Demint, who “from time-to-time and at her whim, [would] deposit some money” into the plaintiff's account. (Id. ¶ 41.) The defendants did not provide the plaintiff with an accurate wage statement, or with an accurate wage notice when she was hired. (Id. ¶ 43-44.) They also paid her less than minimum wage for several months in 2019. (Id. ¶ 3.)

The plaintiff claims that the defendants violated the overtime provisions of the FLSA, NYLL and NYCRR, the minimum wage provisions of the FLSA, NYLL and NYCRR, the spread-of-hours requirements under the NYLL and NYCRR, the weekly-pay requirements for manual workers under the NYLL, and the accurate wage statements and wage notices provisions of the NYLL. (Id. ¶¶ 48-94.) As explained below, the plaintiff brought this action on behalf of herself, individually, as well as on behalf of “all others similarly-situated” (id. at 1), and seeks equitable relief and monetary damages. (Id. at 20-22.) a. Corroborating Evidence

The plaintiff's testimony, as well as that of MichPat's 30(b)(6) deponent Michelle Robey, corroborates the allegations in the complaint and the plaintiff's declaration. Robey explained that there were “two overall classifications” of employees at MichPat's Dairy Queen-“crew or manager.” (ECF No. 32-5 at 54:2-4.) The crew team covered four sections of the restaurant: “grill, ” “chill, ” “prep, ” and “front counter.” (Id. at 111:11-17.) Management had three tiers- assistant manager, manager and general manager. (Id. at 51:12-18.) Crew employees and managers were responsible for overnight and after-close tasks, including cleaning dishes and equipment, as well as receiving deliveries and stocking inventory. (Id. at 32:7-34:14.) Crew employees had almost no administrative responsibilities, although they were expected to complete harassment training, and they had to sign off on cleanliness and quarantine requirements during the pandemic. (Id. at 84:8-85:4.) Assistant managers and managers “definitely had more administrative responsibilities” (id. at 85:5-7), but 90 percent of their responsibilities were non-administrative. (Id. at 86:18-21.) According to Robey, the managers were “very hands-on” and did “the same type of work as the crew people.” (Id. at 87:4-8.) All employees were paid by the hour (id. at 56:13-57:6), and on a bi-weekly basis, from the time the store opened through March of 2020, when the company switched to paying every week because Robey “felt that the employees needed more regular access to their pay.” (Id. at 83:10-23.)

Between 2017 and 2019, the plaintiff worked in various positions as a crew member and manager-she was a grill worker (id. at 109:25-110:21; ECF No. 32-6 at 16:14-22), cashier (ECF No. 32-5 at 109:18-24), maintenance manager (ECF No. 32-6 at 73:22-75:3) and assistant manager. (ECF No. 32-5 at 110:22-111:10.) The plaintiff was “only paid one salary, ” regardless of her position, because, as Robey explained, her salary “was tied to her date of employment, not to the specific position.” (Id. at 111:4-10.)

As for the alleged hour-shifting scheme, both Robey and the plaintiff testified that an employee's timecard could be changed. (ECF No. 32-5 at 105:5-107:17; ECF No. 32-6 at 39:13-23.) For example, if it appeared that an employee “worked in excess of a number of hours that required a break, ” Robey called her sister or another manager to see whether the employee took a half-hour break. (Id. at 121:19-123:4.) If no one could confirm that the employee took a break, Robey would assume that the employee took a break “if an employee worked over six and a half hours, ” and deduct the employee's hours accordingly. (Id. at 122:20-123:4.) According to the plaintiff, Demint said that “sometimes she'll take some of the days and just move them to a different day because we're not supposed to work long hours” and “if we didn't get a break she would add 30 minutes onto it and give us a break.” (ECF No. 32-6 at 38:23-39:4.) Managers, including Demint, also changed employees' hours when they worked “past their time.” (Id. at 38:11-39:4, 41:20-42:2.) Robey explained that employees could see whether their hours were adjusted if they printed out their timecards at the cash register. (ECF No. 32-5 at 105:5-107:17.)

b. Defendants' Response^[3]

The defendants cite declarations from Robey, Demint and six other MichPat employees that essentially refute the allegations made in the complaint. (ECF Nos. 36, 37, 38, 39, 40, 41, 42, 43.) According to Demint, 75 percent of the plaintiff's responsibilities were administrative rather than manual work. (ECF No. 39 ¶¶ 6-10, 12-13.) Robey and Demint stated that MichPat's employees rarely worked overtime, that any changes to their hours would be reflected in an Edited Shifts report, and that Robey and Demint had no access to or knowledge of employees' punch-codes. (ECF Nos. 38, 39.) Demint denied that she directed subordinates to edit time records; she stated that employees could print out their records and figure out whether their hours were changed, and that 12 of the 20 listed employees in the plaintiffs complaint were minors who were not eligible to work overtime. (ECF No. 39 ¶¶ 6-10, 12-13.) The other six declarations-all from current MichPat employees-echoed Robey and Demint's position that the plaintiff was primarily an administrator rather than a manual worker; like Robey and Demint, the employees also claimed that only they had access to their own punch-codes, that they routinely checked their hours for mistakes, and that there were no changes to their hours unless they forgot to clock in or out. (ECF Nos. 36, 37, 40, 41, 42, 43.)

II. Collective and Class Actions

The plaintiff seeks certification of an FLSA...